Safeway exploring sale of the company

by press release | February 20, 2014

Safeway Inc. is in discussions concerning the possible sale of the company.

“Although the discussions are ongoing, the company has not reached an agreement on a transaction, and there can be no assurance that these discussions will lead to an agreement or a completed transaction,” the company said in a press release. “The company will not comment further on these discussions at this time.”

Reuters reported that the company is currently in talks with Cerberus Capital Management LP about the transaction.

"We are pleased with the progress we made in 2013," Robert Edwards, Safeway's president and chief executive officer, said in a press release. "Strategies to grow sales and improve operating profit dollars have begun to produce results. In 2013, we generated our best volume growth since 2006, and we had our best identical-store sales growth in the last five years. At the same time, we continue to pursue strategies to enhance momentum and increase shareholder value. We look forward to continuing progress in 2014."

The company has decided to distribute the remaining 37.8 million shares it owns of Blackhawk Network Holdings to Safeway stockholders. Currently, the plan is to make the distribution on a pro rata basis to all Safeway stockholders in a transaction intended to be tax-free to Safeway and its stockholders. However, if the company consummates a sale transaction, the distribution may be taxable. The timing and details of the proposed distribution will be determined in the near future, and further announcements will be made when those decisions have been finalized.

In addition, Safeway is exploring the possibility of monetizing its investment in Casa Ley S.A. de C.V., the fifth-largest food and general merchandise retailer in Mexico based on sales. Safeway currently owns 49 percent of the company.

“While the company has discussed its desire to monetize its investment with the majority owners of Casa Ley, there can be no assurance as to whether the company will be able to sell its interest in Casa Ley at a price and on terms that the company finds acceptable,” the company stated in the press release.